Pricer: Growth tailwinds to continue in H2 - ABG

Operations continue to improve
Pricer continues to benefit from its strong position in the rapidly growing ESL market. Sales grew 35% y-o-y (vs. ABGSCe +34%), while adj. EBIT grew from SEK 3.5m in Q2’20 to SEK 22.6m (ABGSCe SEK 19.1m) as a result of the improved volumes. Orders grew 26% y-o-y to SEK 408m, driven by both previously announced framework agreements (e.g. related to CTDA and Carrefour) and ongoing operations. Pricer’s quarterly underlying order intake (i.e. unannounced orders) has now been >SEK 275m for four consecutive quarters, and we therefore believe that these are sustainable levels. We believe that Norway and Canada have recently performed particularly well, with the former being driven by a shift from segment labels to graphical labels, while the latter is being driven by increased ESL penetration. Although gross margins rose q-o-q due to an improved sales mix, they remained burdened by the distressed supply chain. We expect this to linger in H2 but to improve in 2022.